Most of the major tobacco companies posted continuous sales growth during the past two quarters, April-June and July-September 2009. The largest domestic tobacco company, ITC (Indian Tobacco Company Ltd.), with cigarette brands such as India Kings, Classic, Gold Flake, Navy Cut, Bristol, Scissors, Capstan and Flake, registered sales growth of over 20% in the tobacco business in both the quarters ending June and September this year.During the first quarter of FY10, in terms of sales, the tobacco business grew by 23%, whereas, during the second quarter of FY10, the cigarette business went up by 21% to Rs 2199.69 cr compared to a year ago.

But Kurush Grant, divisional chief executive at ITC’s tobacco division, told SundayET (Economic Times) that the graphic and text health warnings on tobacco products have been notified by the government and the rules are very clear on the specific warnings to be depicted on different types of tobacco packets.

Kurush: “ITC conforms to all the requirements notified by the government. Unfortunately the illegal and smuggled sector which has grown dramatically over the last few years does not comply with these rules, apart from evading excise and VAT. In addition most cigarettes sold in duty free shops do not comply with the rules. This should be taken up most strictly.”

Tobacco companies in the business of manufacturing cigarettes also contend that in India consumption of tobacco in cigarette form is just 15% of the total tobacco market while globally, on average, cigarettes account for nearly 90% of tobacco consumption.

But it’s not only ITC that has seen its tobacco business grow after the pictorial warnings rule was implemented. K K Modi group company Godfrey Phillips India, with cigarette brands such as Stellar Slims, Four Square, Red & White and Cavanders posted sales growth of around 17% in its tobacco business to Rs 288 cr during quarter ending September 2009. Also, during the previous quarter the tobacco business of the company grew by a whopping 47%. Godfrey Phillips could not be contacted for comments.

Other companies in this segment such as Golden Tobacco and RDB Industries also recorded healthy growth in their tobacco business during quarter July-September, 2009. While the tobacco business of Golden Tobacco grew by 7%, RDB Industries showed a growth of 36%.

Though India is one of the 18 countries in the world to have introduced graphic health warnings on tobacco products, experts feel that the number of smokers here is increasing while in the west the numbers are on a steady decline. Reportedly there are around 120 million tobacco users in the country and smoking is predicted to cause around 1 million deaths a year.